India offers $78 bn of annual additional life insurance premium opportunity over 2021-2030
The insurance industry in India has witnessed an impressive growth rate over few the last few years. Moreso since the Covid situation, the life insurance industry in India is poised to experience prodigious growth over the next few decades. Continuous economic growth, favorable demographics coupled with rising gaps across mortality protection and retirements savings are some of the leading factors. According to IBEF, in September 2021, new premiums of life insurers registered 22.2% growth, up from 2.9% in September 2020.
We delve deeper into how the life insurance industry in India is set to evolve and spark a new epoch for growth in a conversation with Murli Jalan, Head – Tied Agency & Direct Distribution, Bharti AXA Life Insurance.
What are the opportunities and trends in the life insurance market that you see post 2020?
The tremendous opportunity in the life insurance space is accentuated by the fact that total life insurance premiums should grow by 400% over the coming decade to reach an astounding Rs 24 lakh crore by 2031. The shift in consumer perceptions, rise in awareness, growth of online channels and large-scale adoption of technology are emerging as key drivers in the evolution of the life insurance sector.
For the longest time, life insurance was (and probably still is) seen as a tax-saving instrument that could offer a guaranteed sum assured on maturity. However, the global pandemic resulted in a significant alteration in consumer behavior. Consumers realized that they are living in an uncertain world where nothing can be taken for granted. They realized that it is imperative to own life insurance for protecting the future of their loved ones.
Awareness about the different types of life insurance policies and their features has increased among consumers, especially millennials. This is evident from a survey that revealed the degree to which Indians are aware of life insurance products (also known as the Knowledge Index) has moved up by 9 points to reach a score of 55.
How are emerging technologies altering the insurance landscape? How is Bharti AXA leveraging these technologies?
The rise of new technologies is transforming multiple areas within insurance. Insurers are able to have a deeper understanding of customers, run profitable marketing campaigns, enhance customer service and make effective business decisions.
For instance, at Bharti AXA Life, we have been effectively using multiple emerging technologies. We have come up with an award-winning platform M-smart app, which enables agents to fill forms, provide service, update customers about their policy status digitally and more. Thus, improving agent/partner productivity and customer experience. Optical Character Recognition is used for data extraction from documents for eliminating manual document verification. This expedites the customer onboarding process, results in substantial cost savings and optimizes customer journeys.
We plan to leverage customer 360 platforms, Data Lakes and more to acquire a single view of a customer and all their interactions across multiple platforms with the organization. This will enable rapid decision making, effective cross-selling and up-selling initiatives, profitable marketing campaigns and optimal customer experiences. We are implementing Machine Learning Models to predict early claims, recommend products for cross-selling and drive suitable communication initiatives during renewals.
How is product innovation enhancing awareness, increasing acceptability and improving affordability to drive customer retention?
Low awareness among consumers about the benefits of life insurance can be tackled by simplifying life insurance offerings. We at Bharti AXA Life have decided to jettison jargon and simplify insurance. We have adopted simplicity in our products, processes, and communication with customers and partners across multiple touchpoints.
Moreover, Indian consumers are fiercely value-conscious. Therefore, insurers need to launch innovative and affordable solutions that can meet the needs of customers today. At Bharti AXA Life, one of our key focus areas is product innovation that keeps the customer’s needs at the center. Two of our products – Bharti AXA Life Guaranteed Income Pro and Bharti AXA Life Flexi Term Pro have also been voted as Product of the Year in one of the largest consumer surveys conducted by Nielsen owing to an emphasis on innovation.
How is the business model of the insurance industry changing?
The industry now needs to move from the current “Assess and Service” model, where data is used to assess risks & provide standard products and care suggestions, to the ‘predict, personalize, engage, & share value” model, pivoted around deeper customer engagement in the advice-based model. This will help insurers offer customers personalized products and suggestions. This will not only greatly improve customer experience but also enable agents to reach customers more effectively.
In line with what the future holds, and the growing customer preferences for digital savviness, at Bharti AXA Life, we are focusing on leveraging technology to simplify life insurance for our customers and partners – be it issuance, claims, servicing, or any other engagement.